Sales, Licensing & Marketing Agreement

BITSTREAM INC. & TUMBLEWEED SOFTWARE CORPORATION



JOINT DEVELOPERS' AGREEMENT FOR



SALES, LICENSING, AND MARKETING OF



TUMBLEWEED'S PUBLISHING ESSENTIALS AND COMPONENTS







This Agreement is entered into and made effective as of the 10th day of June 1996 by and between BITSTREAM INC., of 215 First Street, Cambridge, MA 02142 ("Bitstream") and TUMBL EWEED SOFTWARE CORPORATION ("Tumbleweed ") of 2000 Broadway, Suite 352, Redwood City, CA 94063.



WHEREAS, Bitstream has licensing rights from Novell, Inc. to market and distribute the shrink-wrap version of Envoy Portable Document software and/or components to OEMs;



WHEREAS, Tumbleweed has licensing rights from Novell, Inc. to market and distribute the shrink-wrap version of Envoy Portable Document software;



WHEREAS, Tumbleweed is the owner of certain product derivatives from/for Envoy including but not limited to Publishing Essentials; and will market and distribute them to End-Users and Publishers;



WHEREAS, Bitstream intends to license from Tumbleweed to market and distribute shrink-wrap versions of Publishing Essentials to Resellers and End Users in select areas;



WHEREAS, Bitstream intends to license from Tumbleweed to market and distribute components of Publishing Essentials to OEMs in accordance with the terms and conditions set forth herein;



NOW, THEREFORE, in consideration of the premises and of the mutual covenants and promises herein contained, the parties agree as follows.



1. DEFINITIONS



1.01 As used in this Agreement:



(a) "Product Components" refers individually or collectively to

those products made available to Bitstream by Tumbleweed for

sublicensing hereunder and designated in EXHIBIT A-1,

including, but not limited to, components of Tumbleweed

Publishing Essentials, Related Materials, and all Updates and

Upgrades exclusive of any new product created by either

party. If so designated, the Product Components may include

the software products listed below, all of which have been

developed and are owned by Tumbleweed (except as otherwise

specified), and shall be provided in object code form.



i. "Tumbleweed Publishing Essentials", an integrated collection

of publishing tools;



ii. "Tumbleweed Publisher" generates collections of Envoy

documents;



iii. "Link Builder" suggests and generates hypertext link sources

and destinations;



iv. "Outline Builder" provides a mechanism to build a

cross-document hierarchical outline view;



v. "Rich Text Index Builder" builds full-text indexes that

incorporate both document content and formatting;



vi. "Envoy Distributable Viewer" provides navigational tools to

move around in a document;



vii. "Tumbleweed Viewer Extensions, Workgroup 10 Pack" are

plug-in modules for the distributable viewer.









(b) "Proprietary Rights" means all patents, copyrights, trade secrets

and all other rights in Products and Derivative Works thereof

owned by or licensed to either party whether or not such rights

are protected under patent or copyright laws;



(c) "Derivative Works" means those revisions, improvements,

alterations, adaptations, modifications, translations,

abridgments, expansions, or other form to the Product(s);



(d) "Product(s)" means the software product or products whose sale

and marketing is contemplated by this Agreement, and which may

combine some or all of the products or components described in

EXHIBIT A-1, and in section (a) above;



(e) "End User" is any person or entity who receives a right to use

the Product-- for its own use and not for resale or further

sublicensing--through a license granted by either party or an

OEM;



(f) "OEM", or "Original Equipment Manufacturer", means any legal

entity or person that receives from Bitstream the right to use

the Product and sublicense the Product to End Users in

conjunction with its own products;



(g) "Related Materials" means information in written or other

documentary form supplied by either party to the other that

relates, in whole or in part, to the installation, design, use,

operation, testing, debugging, support, maintenance or marketing

of Product;



(h) "Updates" are new revisions of the Products that improve

functionality and bear higher "Version" decimals.



(i) "Upgrades" are new releases of the Products that generally expand

the capability of the upgraded product, and bear higher "Version"



(j) "Custom Quotation" is the process whereby the OEM requires

modification to the core technology or source code. The OEM will

define the requirements with specific details and request a

quotation for the work to be completed. No obligation is

undertaken until a purchase order and deposit are secured and

accepted by Bitstream as defined in Section 8 of this Agreement.





2. LICENSE GRANTS



2.1 Tumbleweed hereby grants to Bitstream a non-transferable,

non-exclusive license, under Proprietary Rights, subject to the

restrictions set forth in this Agreement:



(i) to use, modify and copy the Product(s) listed in EXHIBIT A for

internal purposes only in connection with the Product(s)

contemplated herein; and



(ii) to reproduce, market, sublicense and distribute the Product(s)

for use in or with OEMs' systems, computers, software,

operating systems, computer hardware including but not limited

to printers, controller boards, ASIC's and ROM based

integrated circuit cartridges; and to authorize OEMs to do the

same, subject to all of the terms and conditions of this



2.2 Tumbleweed hereby grants Bitstream a non-transferable, non-exclusive

license, under Proprietary Rights, subject to the restrictions set

forth in this Agreement, to use and copy the Product in EXHIBIT A-1

and in Section 1(a)(i) above, Publishing Essentials, and to

reproduce, market and distribute the Product(s) via Resellers and

direct to Corporate Accounts, and End Users.









3. OWNERSHIP



3.1 Tumbleweed shall continue to own the Products listed in Exhibit A-1

attached hereto, and all Proprietary Rights, Related Materials,

Updates, Upgrades, Custom Works and Derivative Works thereof. No

right, title or interest in or to such Products is conveyed to

Bitstream hereunder.



4. PAYMENTS; REPORTS; RECORDS



4.1 Bitstream shall collect and retain any access fees and royalties due

on account of its sublicensing and distribution of the Product(s) as

set forth in EXHIBITS B-1 and B-2, any Maintenance Fees as set forth

in EXHIBIT B-3, and any custom work as stated at Section 8.1.

Royalties shall be due and payable as set forth in EXHIBITS B-1 and

B-2 on all such amounts as they are actually collected.



4.2 Bitstream shall furnish written reports to Tumbleweed on a quarterly

basis, indicating the number of copies of the Product(s) for which

payment has been received during that quarter and the royalty, as

applicable, due to Tumbleweed for each hereunder. Payment of the

amount of royalty shown to be due by each report, in U.S. Dollars,

shall accompany the report within ten (10) working days of the last

business day of that quarter.



4.3 Bitstream shall maintain invoices and other records necessary to

substantiate the amount of royalty payments shown to be due by each

report submitted under this Agreement for a period of three (3)

years after the date of each report. Tumbleweed may, at its own

expense, retain an independent certified public accountant to audit

the other party's records no more frequently than once a year,

provided that such audits are conducted with reasonable notice,

during normal working hours of the party being audited, and in such

a way as not to interfere unduly with the operation of its business.

Tumbleweed agrees to keep all information obtained in the course of

any such audit confidential, and to cause its independent certified

public accountant to do likewise; and that such information shall

not be used for any purpose except to verify the amount of royalty

payable hereunder.



4.4 Royalties Payable

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In consideration of the work set forth in the License Agreement

referenced above, Bitstream shall pay to Tumbleweed a royalty for

licensing the Product(s) listed on EXHIBIT A-1 in the manner

described in Section 4 above.



5. JOINT SALES, PROMOTION, AND MARKETING.



As further consideration for the license granted herein and for the

work to be performed by both parties herein, the parties agree to

perform the following sales, promotional, and marketing activities

on behalf of the Product(s):



5.1 Both parties shall coordinate a joint strategy for all customers by

either party for the Product(s). This is intended to encourage a

consistent and cooperative sales, marketing and support effort

between Bitstream and Tumbleweed to the OEM and End-User.



5.2 Tumbleweed and Bitstream shall each use reasonable efforts to

advertise and promote the Product(s) at their own expense, using

trademarks and copyright notices as described in EXHIBIT C-1.



5.3 Tumbleweed and Bitstream shall work together to release significant

company information, timely press releases and public position

statements, including but not limited to the execution of this







6. TRADEMARK AND COPYRIGHT.



Each Party hereby grants to the other Party the non-transferable,

non-exclusive, worldwide right, license and privilege to use the

trade name(s) and trademarks of the other in association with

promotion and sale of the Product(s), as represented in EXHIBIT C-1.



7. CONFIDENTIALITY



7.1. For purposes of this Agreement, the term "Information" shall mean

any and all information, data, know-how and documentation including

but not limited to the Novell, Inc. and Tumbleweed Products and

information related to digital typeface technology, software

products, algorithms, business, marketing and distribution plans,

the terms and conditions of this Agreement, financial statements and

financial projections, and each party's information regarding

customer information, marketing plans and product development, which

either party learns or receives from the other, excluding any

information that the receiving party can document is generally known

in the computer industry, or becomes known to the receiving party

other than through a breach by anyone under an obligation of

confidence, or is provided to the receiving party by a third party

under no obligation to keep such information confidential, or is

independently developed or discovered by the receiving party without

reference to Information of the disclosing party.



7.2 Bitstream hereby agrees to hold the licensed Products and

Information in strict confidence with at least as great a degree of

care as that used to maintain the confidentiality of its own most

confidential information, except as transfers of such Products and

Information are expressly authorized herein.



7.3. Each party agrees that it shall maintain Information and each others

Products for use only by its employees, or individuals who are on

its premises and under its direction and control, for purposes

specifically related to its permitted use of Products or

Information. Each party shall advise the other immediately in the

event that it learns or has reason to believe that any person who

has access to Products or Information, or any portion thereof, has

violated or intends to violate the terms of this Agreement; and each

party will, at its expense, cooperate with the other party in

seeking injunctive or other equitable relief in its own name or that

of the other party against that person.



8. CUSTOM WORK, MAINTENANCE



8.1. Bitstream and Tumbleweed both agree to promote and submit business

proposals for the purpose of contracting with the OEM customer for

custom work [*]. Charges for custom work may consist of a

combination of [*] . [*] charges are payable as follows: [*].



8.2. Maintenance. Tumbleweed agrees to provide Bitstream with all Updates

and Upgrades of the Licensed Products as they become available to be

marketed as stated in EXHIBIT B-3 hereto and the Maintenance

Agreement SCHEDULE 3-B attached thereto., exclusive of any Updates

and Upgrades of the Tumbleweed Plug-ins.



8.3. Bitstream shall provide reasonable technical support, at its own

expense, to its OEMs, End Users and Resellers using the Product(s).

Specific support services, processes and definitions are outlined in

Exhibit D which shall be defined and mutually agreed upon by July 1,



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* Certain confidential information has been omitted and filed separately

with the Securities and Exchange Commission pursuant to a Request for

Confidential Treatment.





9. TERM AND TERMINATION



9.1. This Agreement shall remain in effect from the date of execution, as

first set forth above, and run for a period of three years or until

June 10, 1999, unless first terminated in accordance with either

Section 9.2 or 9.3, or by either party upon thirty (30) days'

written notice. The term may extend an additional twelve (12) months

thereafter in the event that both parties voluntarily agree IN

WRITING to do so. The parties also may choose to enter into a new

agreement that supersedes this one.



9.2. If either party fails to comply with a material term or condition of

this Agreement, the complying party shall give the defaulting party

written notice of such failure. The defaulting party shall have

thirty (30) days after the receipt of notice to cure any indicated

failure. If the failure is not cured within that time, this

Agreement may be terminated, without further delay, by the complying

party sending written notice to the defaulting party. The parties do

not intend that the Agreement may be terminated for minimal or

technical breaches.



9.3. Either party may terminate immediately the license granted in this

Agreement by sending written notice to the other if (a) a receiver

is appointed to take possession of all or substantially all of the

assets of the other party; (b) the other party makes a general

assignment for the benefit of creditors; (c) the other party takes

or suffers any action under any insolvency or bankruptcy act; (d)

the other party sells all or substantially all of its assets,

liquidates or dissolves; or (e) the other party breaches any

provision regarding confidentiality or attempts to convey any

interest in any Product(s) or other property licensed or supplied

hereunder, other than as permitted under the terms of this



9.4. Upon termination of this Agreement by either party under Section 9.2

or 9.3, Bitstream shall, at its option, either return or destroy all

Products, Derivative Works and all copies thereof, in part or in

whole, and in all forms of media. Bitstream shall promptly submit an

affidavit signed by an officer of the respective company that

attests to the destruction of the materials.



9.5. Sections 1, 3, 7, 9, 10, 11 and 12 shall survive termination of this



9.6. Upon Termination any outstanding royalties associated with this

agreement will be paid in accordance with section 4 of this



10. WARRANTIES AND OTHER REPRESENTATIONS



10.1. Tumbleweed warrants ...